Estate agent Countrywide has received a £215,000 fine from HMRC for failing to ensure that policies, controls and procedures regarding money laundering are upheld within the company. This includes inaccurate record keeping and conducting procedures without due care and diligence.
In an anti-money laundering crackdown across England, HMRC officers visited fifty estate agents unannounced when they suspected that regulations were not being adhered to. Not only can these companies be fined but they can also face criminal proceedings if they do not comply. The companies that were checked by HMRC weren’t named, but there were 35 in London, five in Leicester, four in South Buckinghamshire and Berkshire, three in Manchester and one each in Watford, Wolverhampton and Wakefield. HMRC has published on its website a list of ‘name and shame’ businesses which have been fined after failure to comply with the money laundering regulations put in place.
Tepilo, the UK-based online estate agent company established by Sarah Beeny, was fined £68,000 and went into administration in December 2018. Ms Beeney resigned her directorship in 2017, and the Tepilo brand name is now owned by a company that was also not involved.
The economic secretary of the Treasury, John Glen said: “The vast majority of estate agents play by the rules and help us to crack down on dirty money. But I have zero tolerance for firms prepared to turn a blind eye to the law.”
These companies have a responsibility by law to ensure that money laundering does not happen under their jurisdiction and regulations are in place to stop criminals from preying on any weaknesses. It is when these regulations are not adhered to that criminals can find a way in and fraud can occur. Simon York, who is in charge of HMRC’s fraud investigation service, described the inspections as a ‘wake up call’ for those who continued to trade outside the law.
The discrepancies were found within the first week of intelligence-led activity that was monitoring estate agents trading without being registered with the HMRC, which is a legal requirement.
With more than 11,000 estate agents nationwide, HMRC has a big job when it comes to supervising them under Money Laundering legislation. HMRC publishes information to help businesses understand how best to protect against money laundering. Between 2017 and 2018, HMRC dealt out 655 penalties across different platforms worth £2.3 million pounds and also recovered over £31m through the Proceeds of Crime Act.
Estate agents play an important role in the line of defence against the criminals who try their luck, which is why they have a legal and moral obligation to uphold the law and spot anything out of the ordinary.
The EU Anti Money Laundering Laws of June 2017 gave little notice to the estate agents that would have to abide by it. For reasons unknown, the industry was given just one full working day to ensure that working practises were compliant with the new regulations. These are regularly updated to reflect changes in the economic criminal landscape, but the key issues addressed are:
- A high level safeguard for financial cashflow from high risk third world countries.
- Giving EU Financial Intelligence Units powers to engage and cooperate.
- Tackling the issue of terrorist financing linked to virtual currencies.
- Tackling risks linked to pre-paid instruments, such as pre-paid cards.
Money laundering is not a victimless crime and those who engage in it are often known to reinvest funds in other serious crimes, such as drug importation, human trafficking and terrorism.
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